EXHIBIT 10.24
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NONCOMPETITION AGREEMENT
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This NONCOMPETITION AGREEMENT, dated the 31st day of December, 1996 (the
"Agreement") is made as of the Effective Date indicated below by and between
MetaTools, Inc., a Delaware corporation (MetaTools), and Xxxxxxxxx Xxxxxx (the
"Founder").
BACKGROUND
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This Agreement is entered into in connection with and is ancillary to a
Stock Purchase Agreement dated as of December 20, 1996 (the "Stock Purchase
Agreement") between MetaTools and certain stockholders and option holders of
Real Time Geometry Corp., a Delaware corporation ("RTG"), pursuant to which
MetaTools has acquired RTG on the date hereof (the "Effective Date").
Founder is a founder, stockholder and executive of RTG and has been
actively involved in the development and marketing of RTG's products. MetaTools
intends to continue the business of RTG after the Effective Date and integrate
such business into MetaTools's ongoing business. To preserve and protect the
assets of RTG, including RTG's goodwill, customers and trade secrets of which
Founder has, and will, in his role as an employee of MetaTools, have knowledge,
and to preserve and protect MetaTools's goodwill and business interests going
forward, and in consideration for MetaTools's entering into and performing under
the Stock Purchase Agreement, Founder has agreed to enter into this Agreement.
Founder and MetaTools believe the limitations as to time, geographical area
and scope of activity contained in this Agreement hereof are reasonably
necessary to, and no greater than that required to, protect the goodwill and
business interests purchased by MetaTools.
1. Consideration. In consideration for Founder's performance pursuant to
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the terms and conditions of this Agreement, MetaTools shall (1) purchase all of
the shares of RTG owned by Founder pursuant to the Stock Purchase Agreement and
(2) pay Founder (i) $300,000 upon the execution of this Agreement and (ii)
$150,000 on each of the first and second anniversary dates of this Agreement.
2. Noncompete. For three years following the Effective Date, or one year
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from the termination of employment of Founder by MetaTools, whichever is longer,
Founder will not individually or as an employee, partner, officer, director or
stockholder or in any other capacity whatsoever of or for any person, firm,
partnership, company or corporation other than MetaTools or its subsidiaries:
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(a) Own, manage, operate, sell, control or participate in the ownership,
management, operation, sales or control of any business engaged, in the
geographical areas referred to in Section 3 below, in the design, research,
development, marketing, sale, or licensing of any product that is substantially
similar to or competitive with any product created, distributed or known by
Founder to be under development by MetaTools or any of its subsidiaries prior to
the termination of Founder's employment with MetaTools;
(b) Own, manage, operate, sell, control or participate in the ownership,
operation, sales or control of any business engaged, in the geographical areas
referred to in Section 3 below, in the design, research, development, marketing,
sale, or licensing of any product that is substantially similar to or
competitive with the products of MetaTools or any of its subsidiaries;
(c) Directly or indirectly develop any product that is substantially
similar to or competitive with any other products the creation or development of
which he participated in during Founder's employment with RTG, MetaTools or any
of its subsidiaries; or
(d) Recruit, attempt to hire, solicit, assist others in recruiting or
hiring, or refer to others concerning employment, in or with respect to the
geographical areas referred to in Section 3 below, any person who is an employee
of MetaTools or any of its subsidiaries or induce or attempt to induce any such
employee to terminate his employment with MetaTools or any of its subsidiaries.
3. Geographic Area. The geographical areas in which the restrictions
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provided for in this Agreement apply include all cities, counties and states of
the United States, and all other countries, in which MetaTools or any of its
subsidiaries has engaged in licensing or sales or otherwise conducted business
or selling or licensing efforts at any time during the two years prior to the
Effective Date hereof or during the term of this Agreement. The agreement not to
compete in each such geographic subdivision is a separate and severable
agreement from all such other agreements. Founder acknowledges that the scope
and period of restrictions and the geographical area to which the restrictions
imposed in this Section 3 applies are fair and reasonable and are reasonably
required for the protection of MetaTools and that this Agreement accurately
describes the business to which the restrictions are intended to apply.
4. Injunctions. Founder acknowledges that any breach of the covenants of
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this Agreement will result in immediate and irreparable injury to MetaTools and,
accordingly, consents to the application of injunctive relief and such other
equitable remedies for the benefit of MetaTools as may be appropriate in the
event such a breach occurs or is threatened. The foregoing remedies will be in
addition to all other legal remedies to which MetaTools may be entitled
hereunder, including, without limitation, monetary damages.
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5. Miscellaneous.
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(a) Notices. Any and all notices permitted or required to be given
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under this Agreement must be in writing. Notices will be deemed given (i) when
personally received or when sent by facsimile transmission (to the receiving
party's facsimile number), (ii) on the first business day after having been sent
by commercial overnight courier with written verification of receipt, or (iii)
on the third business day after having been sent by registered or certified mail
from a location on the United States mainland, return receipt requested, postage
prepaid, whichever occurs first, at the address set forth below or at any new
address, notice of which will have been given in accordance with this Section
5(a):
If to MetaTools: MetaTools, Inc.
0000 Xxxxxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
With a copy to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx Xxxxxxxxxx 00000-0000
Attn: Xxxxxxx X. Xxxxx, Esq.
If to Founder, at Founder's address in the personnel records of MetaTools.
(b) Amendments. This Agreement contains the entire agreement and supersedes
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and replaces all prior agreements between MetaTools and Founder or RTG and
Founder concerning the subject matter hereof. This Agreement may not be changed
or modified in whole or in part except by a writing signed by the party against
whom enforcement of the change or modification is sought.
(c) Successors and Assigns. This Agreement will not be assignable by either
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Founder or MetaTools except that the rights and obligations of MetaTools under
this Agreement may be assigned to a corporation which becomes the successor to
MetaTools as the result of a merger or other corporate reorganization and which
continues the business of MetaTools or any other subsidiary of MetaTools,
provided that, in the case of a subsidiary, MetaTools guarantees the performance
by such assignee of MetaTools's obligations hereunder.
(d) Governing Law. This Agreement will be governed by and interpreted
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according to the substantive laws of the State of California without regard to
such state's conflicts law.
(e) No Waiver. The failure of either party to insist on strict compliance
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with any of the terms of this Agreement in any instance or instances will not be
deemed to be
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a waiver of any term of this Agreement or of that party's right to require
strict compliance with the terms of this Agreement in any other instance.
(f) Severability. Founder and MetaTools recognize that the limitations
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contained herein are reasonably and properly required for the adequate
protection of the interests of MetaTools and therefore it is the intent of the
parties that the provisions of this Agreement be enforced to the fullest extent
permissible, under applicable law. If for any reason a court of competent
jurisdiction or binding arbitration proceeding finds any provision of this
Agreement, or the application thereof, to be unenforceable, the remaining
provisions of this Agreement will be interpreted so as best to reasonably effect
the intent of the parties. The parties further agree that the court or
arbitrator shall replace any such invalid or unenforceable provisions with valid
and enforceable provisions designed to achieve, to the extent possible, the
business purposes and intent of such unenforceable provisions.
(g) Counterparts. This Agreement may be executed in counterparts which when
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taken together will constitute one instrument. Any copy of this Agreement with
the original signatures of all parties appended will constitute an original.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
METATOOLS, INC. FOUNDER
/s/XXXXXXXXX XXXXXX
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By /s/XXXX XXXXXXX Xxxxxxxxx Xxxxxx
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Title Chairman and CEO
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